March is quickly approaching and for those in the world of banking, that means complying with PSD2. Europe’s second Payment Services Directive will create attractive opportunities for payments organizations. It will also affect what business models are profitable and create heightened customer expectations around the services being offered.
At Enfuce, we think that in order to thrive, banks need to view compliance as part of a broader digital transformation and learn to collaborate rather than compete. We believe that by creating an open API infrastructure, companies can form their own business ecosystems where they can connect, transact, and grow. Only then can they create and maintain a competitive advantage in the future.
Compliance is the first step
It’s no surprise that the focus for most banks is on compliance. That’s where the majority of time and investments are currently directed. But it should also be considered the first step.
While PSD2 will lower costs and increase choice for consumers, complying with the regulations is set to increase IT costs for banks. Some have chosen to build and maintain their API’s in-house, while others have chosen a partner to outsource this compliance to.
Whether it’s done in-house or is outsourced, it’s important to understand that compliance is the bare minimum. What comes next will help establish your company’s new value proposition in the market.
Customer engagement is key
The ability to access data across multiple platforms will create fierce competition for customer touchpoints. Companies that offer the best customer experience will create the highest level of engagement. By offering a superior customer experience, banks can maintain brand loyalty and encourage users to choose their platform as the service of choice.
Imagine providing a service to your customers´, where they can see all of their accounts from other banks, consolidated into your service allowing them to create budgets, savings, and investment goals. In effect, your bank would become your customers’ one-stop personal financial shop.
In each example, you want to be the platform of choice for your customers to log into and gain valuable insights about their accounts. Only by owning their engagement can you increase your share of wallet.
Be open and add value
Aggregating account balances and providing some form of analytics will help drive engagement and brand loyalty. However, it won’t necessarily create new revenue streams. This is where collaborating with third parties and partners will help banks deliver additional value. Customers will be searching for the platform that offers them a seamless experience with a large number of choices to suit their financial needs. There’s no need for banks to develop these services on their own.
By keeping customers on your platform and integrating with third party providers and partners, you’ll create a scenario where you can deliver additional value-adding services and establish cross-sell opportunities. Those services may be yours or your partners’, but either way, you’ll create new revenue streams that didn’t exist before PSD2. At Enfuce we have the capability to facilitate an ecosystem like this with our Open Banking platform.
By creating a superior customer experience, maintaining brand loyalty, and creating meaningful integrations with partners, your company will be able to offer an entirely new value proposition to your customers. It’s not about complying, it’s about prospering in the new era of Open Banking!
Enfuce Financial services is a forerunner in cloud-based financial services. Enfuce provides its customers with payment platforms that are fast to market, secure and easily scalable. All of this while still being Level 1 PCI DSS compliant and approved by the Finnish Financial Supervisory Authorities.
Discover how working with an agile partner can help your business thrive in the world of Open Banking. Let us be in touch with you to discuss have we can bring your business to the next level!